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Saturday, August 25, 2007
Price change on Edwards Ave.
Central heat
Tuesday, August 21, 2007
Market conditions: Oakland, 94619 a modest decline
Oakland's 94619 zip code takes in a wide swath of the eastern portion of Oakland: from the modest bungalows of the Allendale, below MacArthur, starting around Brookdale Ave., extending eastward across 580 ,and up-hill through the Laurel, across highway 13, and then ending in the dizzying heights and prices of luxury hillside homes around Skyline Blvd.
The average sales price can jump or slide depending on the particular mix during a short period of time. On a monthly basis, for instance, a comparison between 2006 and 2007 closed sales for the area can show an upward spike 24% in March or a plummeting -22% slide the following month.
We get a more temperate, and accurate, picture when we expand our view over the entire calendar year. Comparing 2006 with 2007 through July, the average listing price dropped by 1% for the year, but the average sold price dropped by 3%. That 2% gap seems to indicate that some of the sellers are just not getting the message.
Does this mean that buyers can low-ball anything by 3%? Not at all. There are still multiple offer and overbid situations in the area. A modest home in Oakland's Montclair district just closed for $91,000 over the asking price. Then should a buyer offer more than the asking price in a declining market? Not necessarily; it all depends on the particular property. Value is always the key concept. Price is an amalgam of free opinions: what the agent thinks, what the seller thinks, sometimes what the agent thinks will get the listing signed, and sometimes what the seller thinks is needed in order to "have room to come down". Value is established only when the buyer pays and the seller accepts. There is no substitute for a detailed and thoughtful comparative market analysis of your property. Would you like one for your property? Call or e-mail me and let's talk.
Coming soon: similar reports on other key East Bay areas like Oakland 94602, North Berkeley, El Cerrito, Richmond North & East, and Pinole.
The average sales price can jump or slide depending on the particular mix during a short period of time. On a monthly basis, for instance, a comparison between 2006 and 2007 closed sales for the area can show an upward spike 24% in March or a plummeting -22% slide the following month.
We get a more temperate, and accurate, picture when we expand our view over the entire calendar year. Comparing 2006 with 2007 through July, the average listing price dropped by 1% for the year, but the average sold price dropped by 3%. That 2% gap seems to indicate that some of the sellers are just not getting the message.
Does this mean that buyers can low-ball anything by 3%? Not at all. There are still multiple offer and overbid situations in the area. A modest home in Oakland's Montclair district just closed for $91,000 over the asking price. Then should a buyer offer more than the asking price in a declining market? Not necessarily; it all depends on the particular property. Value is always the key concept. Price is an amalgam of free opinions: what the agent thinks, what the seller thinks, sometimes what the agent thinks will get the listing signed, and sometimes what the seller thinks is needed in order to "have room to come down". Value is established only when the buyer pays and the seller accepts. There is no substitute for a detailed and thoughtful comparative market analysis of your property. Would you like one for your property? Call or e-mail me and let's talk.
Coming soon: similar reports on other key East Bay areas like Oakland 94602, North Berkeley, El Cerrito, Richmond North & East, and Pinole.
Wednesday, May 16, 2007
What's a neighbor to do?
Today I participated in an exchange with a frustrated neighbor regarding the amount of effort it seems to take to get public resources directed to particular traffic and safety issues. I thought it was worth re-posting here.
My neighbor P____'s posting:
My response:
My neighbor P____'s posting:
At the risk of offending others, I want to say that Not every street can easily be organized. Maybe [the street in question] as a whole can be organized, but this block is populated by very nice people who 1. don't speak English, 2. don't like meetings, 3. think things are fine. Believe me, I've tried.
My response:
Unfortunately what P_____ says is true. We have similar issues here. I have worked as a volunteer cat behaviorist in the locked ward of the SPCA and I would rather "herd cats" than try to organize my neighbors. But when I say "organized" I am referring to approximately 10% of the households. There are only 6 out of over 60 households on my large block who regularly participate in our block group efforts. Our one project has been dragging on for over two years. There was some opposition, plenty of apathy, a bit of suspicion, quite a few non-English speakers, and some very discouraging comments. Yet, it is a start, and we less-than 10% managed to get over 70% to agree to our speed bump petition. We hope to see the result of our labors before the end of the summer. I have also made a couple of new friends among my neighbors and deepened my friendship with others.________________________________
At the end of my work day, and some days it never really ends, I would rather not go to a meeting, circulate, a petition, or distribute fliers. And I really do very little of it. Especially compared to some of the real organizers and like Daniel, Edward, Carolyn, Hoang, and Ruth. Sometimes it's more than enough to just feed the screaming cat, throw away the mail, and get some dinner on the table. Cynicism, lethargy, the lure of electronic devices, and just plain fatigue work against participation. But if, every once in a while, just a few of us would aspire to emulate Adlai Stevenson's homage to Eleanor Roosevelt*, I believe that we will see some change for the good. What is the alternative making some effort to improving our civic suffering? Do we make some small effort in hope of reaching a tipping point of success, or do we just take the advice of Job's wife to "Curse God and die"?
*"She would rather light candles than curse the darkness, and her glow has warmed the world."
Monday, May 14, 2007
8 Important Issues About Condos
After talking to thousands of people about buying condominiums, co-ops,(see more about co-ops in my earlier post),and town homes in the Bay Area I have developed a list of the top features that they are looking for, or should look for, when considering their purchase. It’s time to put it all in one place where it’s easy to see and convenient to use as a checklist. Perhaps, if I have overlooked something, one of my readers can add a missing essential.
1. I don’t need no stinkin’ laundry room: Private laundry is the single most important feature that buyers don’t want to give up if they are choosing a condo over a single family home. Convenience, privacy, sanitary issues, and security all figure in to the decision. They are all valid reasons on an individual basis, but I can add another from a professional point of view. As a broker I am seeing that most new construction and conversions now include washer/dryer hook-ups. Sometimes, in the case of small units, a European washer/dryer single machine is offered. This trend has effectively created two classes of condos: with and without laundry. Resale value will be better in those with their own appliances in the unit.
2. Home, home on the range: for the late part of the 20th century electric ranges and ovens were typical of many multi-unit buildings whether built as condos or apartments. In our area where cuisine is highly prized and a the lack of a nice kitchen is sometimes a deal breaker, a gas stove increases desirability for a significant portion of the buyer market.
3. Where do I put my stuff: storage, both long term and every day is often an issue. Space in most condos is allocated efficiently and sparingly to maximize profitability in an environment where land costs are very high. Having that extra closet, or a near by storage locker, can make a big difference.
4. Love me, love my dog: Pets are a wonderful part of life for many of us. In fact the ability to have a pet, without a landlord’s approval, is one of the major satisfactions of moving from renting to owning. Just be sure that your pet(s) fit within the community’s rules. Typically you are allowed to have one pet less than 25 pounds. Sometimes two cats are allowed, or any combination of cats and dogs as long as they are each within the size limits. Check the rules carefully before wrting an offer and certainly before removing your inspection contingency.
5. Parking: cars are a major fact of California life and households with two or more cars are common. A second reserved space, even if it’s tandem, is a welcome feature. Even the ability to park in a non-reserved guest space is a real plus. Check into this carefully if you need extra parking. In some communities the guest spaces are just that, for the temporary use of guests. While visiting a friend in Honolulu I assumed that I could keep my rental car in a guest space in his garage overnight. It turns out that guests must vacate by midnight or get towed. After many hours of holo-holo (Hawaiian for driving around)looking for parking, I decided to do without a car on my next visit.
Also of high value to homeowners are larger and individual private garages as opposed to a space or spaces in a shared garage. Sometimes it’s about doing some work on your car, but more often the issue is storage and convenience.
6. The great outdoors: having a private space, whether it’s a deck, patio, balcony, or yard is a wonderful addition. Sometimes it becomes adjunct storage space for bikes or strollers. Sometimes it’s your alternative kitchen when the weather permits. Again, make sure that the community standards allow your intended use. For instance, one community in Castro Valley community has a fire safety rule restricting the type of barbeque grill you can use.
7. La la la la I can’t hear you: Noise is a major issue and it’s not always someone else’s noise. It could be your own sound system presenting an aggravation to other owners. That’s one of the reasons why stand alone units and any units that have minimal shared walls command a premium.
8. HOA Dues: The more services you have, the more you will pay in HOA dues. The typical elements of community dues are: insurance for the overall structure, water, trash, utilities for the common area, management fees, and reserves. Beware of low dues, yes I said low dues. Dues are supposed to accumulate enough savings to replace or repair major components. It’s the equivalent of a house owner figuring out that the house needs painting in five years, that it will cost $6,000 to do the job, and then putting $10 a month in a savings account to accumulate the cash. In a shared housing community, the owners could face an assessment, a demand for an additional financial contribution, to pay for repairs when a community has insufficient reserves to do the work.
1. I don’t need no stinkin’ laundry room: Private laundry is the single most important feature that buyers don’t want to give up if they are choosing a condo over a single family home. Convenience, privacy, sanitary issues, and security all figure in to the decision. They are all valid reasons on an individual basis, but I can add another from a professional point of view. As a broker I am seeing that most new construction and conversions now include washer/dryer hook-ups. Sometimes, in the case of small units, a European washer/dryer single machine is offered. This trend has effectively created two classes of condos: with and without laundry. Resale value will be better in those with their own appliances in the unit.
2. Home, home on the range: for the late part of the 20th century electric ranges and ovens were typical of many multi-unit buildings whether built as condos or apartments. In our area where cuisine is highly prized and a the lack of a nice kitchen is sometimes a deal breaker, a gas stove increases desirability for a significant portion of the buyer market.
3. Where do I put my stuff: storage, both long term and every day is often an issue. Space in most condos is allocated efficiently and sparingly to maximize profitability in an environment where land costs are very high. Having that extra closet, or a near by storage locker, can make a big difference.
4. Love me, love my dog: Pets are a wonderful part of life for many of us. In fact the ability to have a pet, without a landlord’s approval, is one of the major satisfactions of moving from renting to owning. Just be sure that your pet(s) fit within the community’s rules. Typically you are allowed to have one pet less than 25 pounds. Sometimes two cats are allowed, or any combination of cats and dogs as long as they are each within the size limits. Check the rules carefully before wrting an offer and certainly before removing your inspection contingency.
5. Parking: cars are a major fact of California life and households with two or more cars are common. A second reserved space, even if it’s tandem, is a welcome feature. Even the ability to park in a non-reserved guest space is a real plus. Check into this carefully if you need extra parking. In some communities the guest spaces are just that, for the temporary use of guests. While visiting a friend in Honolulu I assumed that I could keep my rental car in a guest space in his garage overnight. It turns out that guests must vacate by midnight or get towed. After many hours of holo-holo (Hawaiian for driving around)looking for parking, I decided to do without a car on my next visit.
Also of high value to homeowners are larger and individual private garages as opposed to a space or spaces in a shared garage. Sometimes it’s about doing some work on your car, but more often the issue is storage and convenience.
6. The great outdoors: having a private space, whether it’s a deck, patio, balcony, or yard is a wonderful addition. Sometimes it becomes adjunct storage space for bikes or strollers. Sometimes it’s your alternative kitchen when the weather permits. Again, make sure that the community standards allow your intended use. For instance, one community in Castro Valley community has a fire safety rule restricting the type of barbeque grill you can use.
7. La la la la I can’t hear you: Noise is a major issue and it’s not always someone else’s noise. It could be your own sound system presenting an aggravation to other owners. That’s one of the reasons why stand alone units and any units that have minimal shared walls command a premium.
8. HOA Dues: The more services you have, the more you will pay in HOA dues. The typical elements of community dues are: insurance for the overall structure, water, trash, utilities for the common area, management fees, and reserves. Beware of low dues, yes I said low dues. Dues are supposed to accumulate enough savings to replace or repair major components. It’s the equivalent of a house owner figuring out that the house needs painting in five years, that it will cost $6,000 to do the job, and then putting $10 a month in a savings account to accumulate the cash. In a shared housing community, the owners could face an assessment, a demand for an additional financial contribution, to pay for repairs when a community has insufficient reserves to do the work.
Friday, May 11, 2007
"As Is"
It depends on what the meaning of the word 'is' is.--President Bill Clinton testifying at the
grand jury investigating the Lewinsky affair.
"As is" does not mean much in and of itself. Sellers still have to tell buyers what "is" is. There are a variety of laws regulating what must be disclosed in a residential real estate transaction. In California sellers are specifically required to disclose any knowledge of un-permitted work, the existence of lead based paint, a death on the property during the past three years, and a host of other things. Agents involved in the transaction are also required to make disclosures. Once the sellers and the agents have done their statutory and fiduciary duties, they can then negotiate for buyers to take the property "as is", meaning really "as disclosed". Even so, buyers can expand the definition of "is" by having inspections. Sometimes buyers will waive inspections, relying on their own knowledge and the existing documentation. There is nothing wrong with that. It can be a good tactic to make an otherwise unacceptable offer attractive to a seller. But any seller who insists that a buyer cannot have inspections is begging for a lawsuit for fraud. It's one thing to shorten the inspection period. The seller does not want to waste time or lose other offers. It's something else entirely to preclude any inspection. If a seller wants a buyer to purchase a property "as is" then the seller should give the buyer an opportunity to determine for themselves exactly what the meaning of "is" is.
Tuesday, March 27, 2007
Tiny bubbles
I'm sure you have heard about the rumble in the "sub-prime" lending market. The effect of this upset has been to cut off a number of potential buyers with 100% financing. There are still "nothing down" loans available but, unlike the wild and crazy days, the borrowers have to prove that they have enough income to pay the loan every month, and that the income they claim to have is really there. One of my preferred lenders sent me an e-mail pointing out that the very low quality borrowers, people who basically inflated or even lied about their income, accounted for 12% of the home loans last year but they are also turning out to make up 77% of the people defaulting on their mortgages. Its a garbage in = garbage out equation. There is no monolithic bubble, but instead a wide range of personal little bubbles of people who get over-extended with the encouragement sometimes of loan brokers and lenders who just want to get their origination fees from the bank and get out.
That's why I have a select group of ethical lenders I work with. I am not primarily interested in the sales hype of "I can get your client a loan", but rather in the professionals who will counsel my client about their best loan options given their financial situation.
That's why I have a select group of ethical lenders I work with. I am not primarily interested in the sales hype of "I can get your client a loan", but rather in the professionals who will counsel my client about their best loan options given their financial situation.
Monday, March 19, 2007
First time landlord?
Investment is an important aspect of real estate that sometimes stands alone or can be combined with home ownership. The idea of having a multi-unit building to help with the payments is a common goal and one that can work well in the right circumstances. But be sure you know what you are getting in to. It's important to have reliable resources, especially when entering a new venture.
One very important recommendation is that you contact the Rental Housing Association of Northern Alameda County. For a fairly small membership fee you will have access to lots of resources including the necessary forms and disclosures. This is particlarly important to avoid running afoul of local rent control ordinances. Tenants have rights that must be respected. A good tenant is an important asset to you if you have rental property. But remember, this is a business relationship. Treat it that way by knowing the relative rights and responsibilities of both parties. Failing to maintain your property and good relations with your tenants is like not changing your oil or letting your tires go bald. But it's worse because it seriously affects other people and their day to day living.
To get my income property clients off to a good start I give them their first year's membership as a closing gift from me. Treating this like a business will help you just in case things go wrong. Their web site is http://www.rhanac.org/ . I have a client who joined so that she could rent out her little condo while in Europe. It has been a big help to her.
One very important recommendation is that you contact the Rental Housing Association of Northern Alameda County. For a fairly small membership fee you will have access to lots of resources including the necessary forms and disclosures. This is particlarly important to avoid running afoul of local rent control ordinances. Tenants have rights that must be respected. A good tenant is an important asset to you if you have rental property. But remember, this is a business relationship. Treat it that way by knowing the relative rights and responsibilities of both parties. Failing to maintain your property and good relations with your tenants is like not changing your oil or letting your tires go bald. But it's worse because it seriously affects other people and their day to day living.
To get my income property clients off to a good start I give them their first year's membership as a closing gift from me. Treating this like a business will help you just in case things go wrong. Their web site is http://www.rhanac.org/ . I have a client who joined so that she could rent out her little condo while in Europe. It has been a big help to her.
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